Administration Signals Change for Wireless Companies

Some wireless companies may think twice about applying for some of the $7.2 billion in broadband stimulus funding, after Obama officials released rules last week that would effectively impose Network Neutrality restrictions on them. Under the rules, all grant winners will be required to follow the FCC's 2005 Internet Policy statement. That statement sets rules which effectively prevent broadband providers from deliberating slowing or blocking competitors' Internet traffic. Stimulus grant winners will "not favor any lawful Internet applications and content over others," according to the notice. That raises a slightly thorny issue for the wireless industry, because there's been some debate about whether the agency's Internet Policy rules actually apply to wireless phone companies. Grant recipients would also be required to "offer interconnection, where technically feasible without exceeding current or reasonably anticipated capacity limitations, on reasonable rates and terms to be negotiated with requesting parties." Administration officials allow a little wiggle room for future grant winners, saying that Internet providers could still portion off part of their network to offer "managed services" which use private network connections that offer a better quality of service. That's important because many Internet providers have been exploring the idea of offering more Internet services using such private networks. The wireless industry had hoped that administration officials would take a light touch when setting rules for the grants and loans.